tv Leaders with Lacqua Bloomberg March 18, 2023 5:00am-5:30am EDT
known, is the biggest advertising firm on the planet. sometime between then and now, specifically in 1989, mark read walked through the doors and played a starring role in that transformation. in 2018, read became chief executive of a firm in crisis. the man who had made the giant, martin sorrell, had stepped down. today, we speak to mark read about a new age of advertising and how to run a business fit for the 21st century. mark, thank you so much for joining us on "leaders with lacqua." what does it mean being an ads man, ad leader in 2022? mark: [laughs] well, i mean, our industry is at such an interesting phase, isn't it? we've just been through the pandemic, we have come out, i think, in many ways, ever more relevant. but we have faced a whole period of continued innovation in our industry, with new advertising formats, new digital companies being launched, e-commerce taking off. our industry is changing and it changes all the time.
but it is changing now, i think, more than ever. francine: but if you look at the pace of change over the last 10 years, i mean, it has been incredible. mark: yeah. francine: can you go through the same pace of change in the next same pace of change in the next 10 years? mark: i think so. i mean, look, we are a big company. we have 100,000 people around the world. we try to also have the heart, if you like, of a small company. to be very responsive. we have people day-to-day working on individual clients, working on client briefs. it is that trick, isn't it? how we get the scale of a big company, but also how we operate quickly and nimbly. francine: other rivals are very focused on spending in tech. what is the future for wpp? mark: well, i think what makes wpp special is creativity. it's ideas. you know, without ideas, there is nothing on these tech platforms.
what would there be on facebook or instagram or youtube without creative work and creative ideas and all of the things that creative people make? i think that creativity is what makes wpp distinctive and where we want to invest. now, of course, with technology, how we bring those ideas to life, where they live, where they exist, that's changing very quickly. so it is really about, sort of, building up what we could call the traditional skills, if you like, of the past, but blending them with a real understanding of data and technology that you need in the future. francine: your role is changing, i guess. is it still just pure advertising, or is it more advising clients and kind of navigating these uncertain times? mark: well, wpp is much more an advertising company today than we used to be. now, clearly, advertising is important to what we do. when you start with that, and the customer says, "what do you do?" i say, "we work in advertising." actually, we are much more than an advertising company. we are as likely to be asked by a client, "how do i succeed on amazon" as we are, "what do you think of this television ad?" so, we have had to learn a tremendous number of new skills over the last 10 years, as you say. francine: what happens in the
next five years? is it going to be amazon? is it going to be twitter? is there something else that will be the hot new thing? mark: one good thing about wpp, we do not need to make those decisions. consumers will decide and we need to be where the consumers are. it is our job, i think, to understand all of those platforms and help our clients understand what is most relevant, where can they reach their consumers most effectively, what is going to deliver the higher return on investment? we are very data and technology and fact-driven today. so, it is both the creative ideas but also the financial returns that are important. francine: and, how did you end up in advertising? mark: sort of by mistake, really. [laughter] francine: a good mistake or a bad mistake? mark: well, i left university. i didn't know what i wanted to do. i wrote to a few business leaders and companies. i ended up working at wpp in the very early days. and, i think, when i started, i never thought i would end up sitting in this seat, if you like, at all. no. francine: what do you like most about your job? mark: i think the people. i mean, ultimately, we are a people business. we have clients who are people, we have creatives who are people, we have technologists who are people.
and a lot of what my job is as ceo of the company is to give those people motivation, to tell much those people motivation, to tell them where we are going, to encourage them to come up and do their best work, to encourage them to collaborate. but ultimately the job is as much, sometimes you think you are almost a psychologist, you know, as you are a business leader, i think, sometimes. francine: what is your best piece of advice? i don't know if it is psychological terms, but if there is a deal that you need to get or account you need to get that you are worried will go to a rival, what is your pep talk like? mark: my pep talk? well, i love pitches. i love leading from the front, if you like, and spending times with teams. i love to see the work we are doing. when we pitch a new business is often when we come together. so, i guess i try to put myself in the seat of the client. you know, what is the client going to think when they see this work? are they going to be excited? is it going to turn their brand around? how is it going to resonate with their consumers? so as much as possible, i try to play that role.
francine: so, how have clients changed, actually, over the years that you have been in advertising? do they ask for different services now, because the challenges are so much bigger? mark: i think clients have a tough time, don't they? we've never lived through a period of so many crises. they're trying to manage enormous budgets, vast, global enterprises. they need trusted advisors, and i think that's kind of, in a sense, why they are looking to wpp and to our agencies and people to bring, you know, a real sense of, if we do this, what will the impact be? you know, from packaging through to advertising through to public relations through to design. and there are many, many new skills. you know, the days of old, if you like, a lot of this was a matter of judgment. now, we are much more data-driven than we used to be. we look at market research figures, we measure the return on investment. we use digital media in that way as well. so, they have become, i think, much more analytically-driven than perhaps they used to be. francine: what is the biggest challenge going forward? is it, if you look at some of the technology companies -- twitter, facebook -- is that still where the future lies? mark: it was interesting, though, in the first six months of this year, if you look at
wpp, we have actually grown more quickly than the average of the four tech companies -- google, meta, snap, and twitter. so, in a funny way, the challenges they faced are somewhat different from the challenges that we've faced. you know, we tend to have bigger, more global clients. we are not so reliant on venture capital-funded startups. so i think we are actually coming into the future in quite a good position. and actually there are going to be a lot of opportunities for us. francine: who do you see as your biggest rival? mark: you know, we compete with our traditional rivals, we compete with the consulting companies. we compete with some clients that try to do some of this work in-house. the great thing is it has always been competitive. two people in a garage could start up an agency. they have done over many years. but i think, for the major clients that we service today, we are in a really, we are in a really good position. you know, we just came off the back, about a year ago, winning the global mandate for the coca-cola company. and they looked at and tested every element of what we do as a business, from coming to develop great creative work in china or india or south africa, to, can we embrace, you know, the media revolution? can we show them how to partner with facebook and google and how
to embrace tiktok and every part of our business? and selected us as their partner. and that talks to the power we have and the scale that we have. francine: is it more difficult now because of the cost-of-living crisis, because of the, you know, economic downturn? do you start feeling it already? mark: look, i think, as i speak to you today, i think clients spend is amazingly resilient, actually. and, you know, we can look at next year, and we can worry about next year. you know, and it is easy -- i've sort of learned not to worry about things i can't control. i can't control the economic environment. all i can do is put wpp and our clients in the best position to navigate it. and when i look at it like that, i think, well, actually, what we do is super relevant. clients have got to demonstrate to consumers what they are doing. we are working with supermarkets to demonstrate how they can help customers save money. clients have got to innovate. they have got to, in many cases, put price increases through. so i think the need for marketing isn't going to go away. and there is no doubt the next 12 months will be challenging, but i think we will come out of
it, as we have done before, in a stronger position. francine: up next, client and consumer. the ad man must speak to both. with people asking ever more from brands, we look at the balance between profit and values. ♪ if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee. all it takes is eight minutes to get started. then work with professionals to assist your business with its forms and submit the application. go to getrefunds.com to learn more. go. go lights. go big city lights. go spotlights. go stadium lights.
any firm's success, particularly in a creative industry. with more than 100,000 employees globally, how do you run a small city as a coherent business? we continue the conversation with wpp chief executive mark read. so, as we look forward to 2023, what do clients ask you the most? mark: you know, we talk to clients about, how much are you going to spend next year? what is the economic outlook going to be? i think, that's really the
period of great uncertainty. i think what we say to clients is, those that have done well should continue to support their brands. because that is ultimately what they need to do. as we saw even during the pandemic, those companies that sort of cut their marketing quickly found it hard to reinstate. i think, we say to clients, two don't be fiscally irresponsible, if you like, but do continue to invest behind your business, invest behind your brands. that's really what they are coming to us to ask is how to do three that. but how do you do that in 2023 means different things, right? what do i do that on tiktok? how do i succeed on amazon? how do i manage my reputation? you know, how important are these influences that we are talking about? they are very different questions from five or 10 years ago. francine: yeah. let's say i had a $10 million budget. mark: yeah. francine: i want to touch the u.s. consumer, not alienate
china, and kind of keep my reputation intact. where -- how do i deploy that money? mark: well, you start -- [laughter] what products are you in, francine? what is the product? francine: what should i be in? [laughter] let's say an energy drink. mark: look, so we are working with a number of soft drinks companies. [laughs] i think you gotta to have a great idea. you have to start with, what does the product stand for and what does it mean to consumers? i still think you got to look across the media mix. i mean, it's interesting, people talk about the death of television, but in some ways, television is being reinvented, isn't it? you know, netflix is taking tv ads. disney+ is going to accept advertising. so those channels, i think, remain super relevant. i think you've got to understand, you know, creativity today in a very different way than before. you know, we are trying to embrace different creative disciplines, from partnering with people from hollywood, like the partnership between the coca-cola company and marshmallo on a new drink. understanding what is going on in the worlds of fashion or sports. those are also very interesting to do. then you answer, how are you going to reach the consumer?
are you going to go through walmart or through amazon or build your own distribution channels? so, i think these are all questions that wpp can help you answer. francine: do i have to have a chief executive political point call chief executive political point of view? so, do i need to, you know, do i have to call out things that are morally wrong in my eyes? mark: no, i do not think brands have to have a political point of view. but i think brands have to understand what is going on in society, what consumers care about, and how what they do is relevant to them. and we did a study, our media agency did a study. it said 82% of consumers care about how brands treat people, treat social issues, so take a position on those. so you have to think about, you know, energy consumption. what is your policy on sustainability? what is your packaging policy? how do you treat your people? where are you going to sell your product, and who are you going to sell it through? so i think those issues are important. i rather think of them about purpose rather than being political. francine: are those real changes? mark: absolutely, they are real changes. i mean, if i look at our people -- francine: and ceo's mean it? mark: i think ceo's do mean it.
certainly, i mean it. the thing about wpp, we have 100,000 people that are passionate about these topics. they want to know, where do we stand on so many of these social or political or societal issues? i think societal is probably a good definition of them, rather than political. francine: how will the qatar world cup actually change advertisers and the relationship with some of the big sporting events? mark: well, i think, our advice to clients is really to think about the world cup as a football celebration, and to get behind football and get behind fans. now, clearly the controversies around, you know, the host nation are problematic. but i think our advice would be, really, as far as they can, just to focus on the football and the support for the football. and it is difficult, i agree. francine: how do you navigate you china? mark: you know, we have a big business in china. we also have a big business in taiwan. again, i was reassured by some of the moves in the biden meeting recently with president xi in bali. i think that is positive. but, again, it is difficult.
francine: mark, there is something that struck me that you said, which is, of course you would advise clients not to slots spend less in advertising, because it has been difficult to ramp it up. are you talking about -- is it like slots? like when you go to heathrow, if you lose a slot, then you don't get it back? is it if you rein in too much, then it is difficult to get the eyeballs needed to sell more? mark: there is an old adage. i know half my advertising works. i do not know which half. francine: [laughs] mark: i think, increasingly, we know much more about what works and what doesn't work for clients. so, i think we can look at, certainly in much of digital media, what the impact is. do clients buy things, do consumers buy things or do they not buy things? so, i think that a lot of the sort of uncertainty in our industry has been taken away by the use of data to measure results. francine: and this is online? mark: online but also off-line. you know, off-line media, we
know that we have many, many rules of thumb to understand how to use off-line media. francine: i know i get pop-ups for stuff when i talk. is my phone spying on me, mark? because i talk about something and then i have an advertising. is that the way that technology is going to go? not necessarily the spying bit, but actually being able to tell me what i want to buy? mark: well, i think we have been very clear. i think that consumers expect a right to privacy, and i think that is a sort of a nonnegotiable. and i think certainly something that we try to push through all our work and everything we do with clients. i think, at the same time, you know, advertising needs to be relevant. and if it is more relevant, it is more useful to you. so, we can use data in a way to make advertising more relevant. but we have to do it in a way that is transparent to consumers, that doesn't misuse their data. i think all of those things are possible in what we are doing, really. francine: so, so what is the model for the future? i know there is also -- and we did a piece on this on bloomberg -- when you go into a shop, and
i think the mannequin is basically scanning your eyes. so, if you're looking at the shoes for an extra three seconds, then that is what pops up in the ipad that you're going around with. mark: i wouldn't advise anyone to do that. [laughter] look, i think the cookie was invented for many reasons. but it became this kind of universal way of, in a way, as you say, of tracking or spying on consumers. and i think that moving away from the cookie is a good thing in terms of online privacy. there's only so much targeting you can do. you know, most of the world buy products from the coca-cola company. there is only so much targeting they need to do to be effective. and so, i think, sort of ultra-targeting has become sort of spooky. it is not helpful. it is not helpful to our clients, and i wouldn't advise them to do it. francine: but if it's coca-cola, everyone knows it. what about smaller brands, my energy drink that i want to sell that no one knows about? mark: there are many ways that you can build a relationship with consumers. it has to be a value exchange. doesn't it? do they follow you on instagram? do they follow you on twitter? you know, what is the value exchange? and i think that if there is a value exchange, then consumers will give you and let you use their data. francine: up next, with recession universally forecast, how does the ad industry weather the storm? mark read on selling in the age of inflation. ♪
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someone that you would love to have on the books that you don't have yet? mark: oh, i'm sure there is. i mean, look, we do fantastic work. i love all of our clients equally. [laughter] francine: of course, like your children. no favorite. mark: look, tesla is an interesting company. you know, so far, they haven't spent money on advertising. i am sure, one day, they will. i mean, i think jeff bezos said back in 2009, you know, advertising is what companies do when they have nothing to differentiate themselves. and amazon, today, is one of the world's top five advertisers. so i think that companies develop and come to a point of view where they need to talk to consumers about what they do, why they are relevant, what they have to sell. i think all of those things make what we do valuable. francine: i mean, it is interesting. if you look at the lifecycle of a business. mark: yeah.
francine: and, i guess, the ability for that business to be disrupted, when is peak advertising moment? when is the right time to really go for it? mark: well, just look at the technology companies, you know, google, amazon, apple are some of the world's biggest advertisers, and they certainly didn't start that way. so, i think that we have learned that, in a modern world, differentiation is increasingly difficult. it is increasingly difficult to do just based on technology or product feature alone. actually, brands, what people think of a company, what they stand for, what they do, that really matters. and i think that is what we are trying to do through advertising. francine: what was the most difficult day in your job? do you remember that day? mark: probably the first day. [laughter] i mean, nothing prepares you to be ceo of a public company. you know, i had worked for wpp for a long time. as i say, it was not a position that i expected to come into. and, you know, if we face it, the company had a few challenges when i started. we had not grown. our debt was probably too high.
we were quite complicated as an organization. and so, if i look back now on that time, you know, just over four years ago, i am pretty proud of what we have all done, you know, collectively, as a team. and it really has been, you know, a collective effort. it is quite an interesting thing, i think. francine: yeah, and your predecessor was sir martin sorrell, so that was also, i guess, a challenge. mark: he had been at the company a long time, but i think when you take on a role, you do it in a different way. don't you? you do it in a way that is right for you. and i looked at where we were. and i think that one of the challenges was, how do we integrate analog and digital? right? because that is sort of something that had become quite complex. so we brought together two agencies, two big integrated agencies that could help clients across the full range of markets to integrate analog and digital. that was the first thing that was important. i think, secondly, really wanted to expand what we did beyond advertising. we were just in the advertising box. we weren't going to grow. so, we expanded off into e-commerce, into commerce, into building experiences for clients, and much more deeply
into technology. and we have been on the journey, really, of reinvention of our traditional businesses, but also expansion into new areas, so the company can grow its topline. francine: is it better being bigger, because you service your clients in more industries and you have more of that data? or does it not make that much of a difference? mark: i think what is interesting is the definition of scale and the competitive advantage that scale has changed. it used to be sort of buying power and buying muscle. we would buy $60 billion of media around the world, that would give us leverage with media owners we'd use on behalf of our clients to get better prices. today's scale comes from data and technology and leveraging that technology investment and that data and that insight over multiple clients. so, i think scale helps, but coming back to the point i made earlier, we have also got to be nimble and smart and quick, because our business is day-to-day interaction with individual clients. so, that is the challenge, how we create that scale without becoming, you know, a big, dare i say, bureaucratic organization, which is the last thing i want to run. francine: mark, how does advertising spending look like
next year? so, in the u.s., and, again, is there really anything to rival the u.s. in terms of consumer spending or advertising spending? mark: advertising, well, the u.s. is the biggest market. together, the u.s. and china are about 50%-plus of the global advertising market. heading in different directions. you know, the u.s. expected to be relatively resilient next year. china, we are not sure. maybe another tough year. you know, global ad spend should be up 6% or 7%. expectations next year are up 5% to 6%, so slightly slower. but don't forget, inflation is now 6%. so, you know, we're used to looking at things in nominal terms, but we forget to take off inflation, which, sadly is, a little bit higher than it used to be. so, i think it is a relatively, you know, a relatively challenging year next year, but i think that things have proven a lot more resilient than people expect. so we will have to see how the year, how the year unfolds. francine: do you think 2023 is the hardest year, or 2024 could be even harder, if there is a lag effect in some of these inflation numbers? mark: i don't know, i mean, look, 2020 was a pretty difficult year. [laughter] so, we have been going through
difficult years. there are many reasons to be optimistic, i think, about the future for our industry. it comes back to the types of questions the clients are asking us. they are much more significant. they are much more important. the secret success of any company is to grow. and i think that we, wpp, and our industry, more broadly, can be really at the heart of our clients' growth. you know, how do they succeed with consumers? how do they reach them in new areas? how do they innovate? how do they create new brands? those questions are going to be just as relevant next year. you know, this whole digital transformation is going to continue. francine: yeah. mark: so these things are not going to go away. francine: so what is the secret sauce of being a great chief executive? do you, do you empower? do you micromanage? what are you like as a chief executive? mark: i like to empower. i mean, i can't do it all on my own. and, as i say, i need to get the best out of the people i work funds for. so, i like to lead a little bit from the front, spending time with clients, spending time in pitches. you know, we are a competitive industry. you know, we are in pitches day-to-day. we win or lose business. so, i think you have to do that. but i also have to create a
company which is collaborative. i think there is a tension between people that want to win, people that want to collaborate, but that is what we are trying to do, you know? the desire to do great work, to really push the boundaries for clients, but also desire to work together, because sometimes -- no one person has a monopoly on the ideas. sometimes francine: where will you be in five years? mark: i think that in five years we might, we will look different and the same. things will be the same. i think it's our belief in creativity, you know, investments in data and technology, but we will probably be a slightly bigger business. you know, today we are 11,000 people in india, 6000 people in brazil, 7000 people in china. i think those numbers will increase. they will probably increase faster than the number of people we have here in the u.k. or u.s. i mean, we are a u.k. company in a sense, but we are really a global company that is headquartered in the u.k. and the u.k. today is only 12% of our business. you know, i don't know that will be wildly different. but i think we will be bigger in other parts of the world. francine: mark, thank you so much for your time today. mark: thanks, francine. thank you. ♪
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